Dropshipping on eBay UK is not a get-rich-quick scheme. If that is your goal when you sign up to eBay UK to dropship products, you might want to reconsider. UK dropshipping, in particular, is a highly competitive industry, and you must learn and adopt the best strategies in a dropshipping business to make more sales from UK buyers.
When you dropship on eBay UK, it works the same way as any other eBay marketplace, with a few unique requirements that cater to the UK market and buyers. If you’ve decided to launch an ecommerce store focusing on the dropshipping business model, you’ve come to the right place!
There are unique specifications on the eBay policy if you want to target UK and British buyers. Ensure you have the right business policies that appeal to these buyers based in the UK, primarily if you’re used to selling and shipping items to the US market.
Use this guide on dropshipping on eBay UK before you start dropshipping. Knowing – and implementing – the best selling strategies could be the ticket to high profit margins and more sales!
Article Overview:
Is it legal to dropship on eBay UK?
Taxation & Business Requirements When Dropshipping on eBay UK
Restrictions and Regulations with eBay UK Dropshipping
Why Dropship on eBay UK?
Get Started on eBay UK Dropshipping
Final Thoughts on eBay UK Dropshipping
Is it legal to dropship on eBay UK?
First, let us address an important question: Is it legal to dropship on eBay UK legal? The answer is yes.
The dropshipping business model is legal and highly profitable. Many eBay sellers in the UK and worldwide prefer it for its low investment capital and low risk profile. And dropshipping is recognized as a business model in the UK.
However, you must know the essential requirements to comply with to legally operate an eBay dropshipping UK business.
Taxation & Business Requirements When Dropshipping on eBay UK
If you live in the US or used to serve other eBay marketplaces, you have plenty of questions about eBay UK dropshipping.
You must first address whether you’re a UK resident or not. You must register your business if you are from the UK and want to start a dropshipping business serving UK buyers.
If not, you must speak with a tax and accounting expert to learn about the taxation requirements for businesses serving the UK market.
For instance, all businesses (even those operating outside the UK) must pay a VAT if your business serves UK buyers. In the UK, the VAT is 20% for every purchase.
Paying the UK VAT is fine, as long as you know how much you must pay so you can add that to your pricing strategy.
For dropshipping businesses based in the UK, there are three taxes you must pay:
- VAT
- Income Tax
- Customs Duty
Ensure you comply with the tax requirements when you dropship on eBay and pay all three taxes (for UK-based businesses). Once you pay your business taxes, you must reflect on your ecommerce store and business policies.
You must be upfront with your customers that their purchase includes VAT charges, custom duties, etc. Transparency is crucial in a dropshipping business to earn the trust and support of your eBay customers.
Moreover, it helps them understand your store’s pricing strategy.
Restrictions and Regulations with eBay UK Dropshipping
Like in the US, running a UK dropshipping business has a few restrictions and regulations. If you don’t want to risk account suspension, you must comply with these rules on your eBay UK account account.
In particular, you must know that certain categories are restricted on eBay UK. For example, some categories are age-restricted, and you must require the UK buyers to verify their age before you can sell items to them.
However, it’s difficult to verify the customers’ ages when dropshipping, so you can avoid the risk of account suspension for your eBay seller account by choosing not to sell these products altogether.
If you check the UK government website, they have also outlined basic rules for distance and online selling. According to the UK government, the seller must provide information to customers when selling, such as the business name, contact details, detailed description of products, prices (with taxes), payment method, shipping methods, and estimated delivery time, to name a few.
In addition, the UK government has specific guidelines on the customer’s right to cancel a service, which applies to streaming and download services. And when the order is placed, it is a must for dropshippers in the UK to deliver the products within 30 days unless you’ve agreed to a different timeline with the customer.
There are exceptions to the above-linked rules and regulations for online selling and dropshipping in the UK. Therefore, you must become familiar with the rules that apply to your situation.
Why Dropship on eBay UK?
Given the unique rules and regulations for eBay UK sellers, why does setting up an eBay online store and serving UK buyers make sense?
The main reason why eBay dropshipping UK is appealing to many eBay seller account owners is the growing market. Statista said the UK ecommerce market grew from 513 Billion GBP to 693 Billion GBP from 2014 to 2019.
You can expect there to be significant growth since 2019, especially as more people are choosing to shop online now more than ever. Therefore, the e-commerce revenue in the UK is estimated to be worth 129 billion in 2021.
The eBay UK website has an average monthly visit of 240 million. It ranks second in the online marketplaces in the UK. Given the extent of the user base and the number of visits, it is the ideal platform for selling online, as you can reach more buyers.
But that’s not all; there is an untapped potential for the UK market for the UK dropshipping business. If you get started with your UK dropshipping ecommerce store today, you will attract more buyers given the fewer UK eBay sellers than in the US market.
Hence, it can be a lucrative business model, primarily if you can deliver high-quality customer satisfaction and keep British buyers happy.
These factors combine to make dropshipping on eBay UK an opportunity too good to resist.
Get Started on eBay UK Dropshipping
Okay, now you understand the basic taxation requirements before you embark on the eBay UK dropshipping journey, and you know this market has massive potential. The next step is to set up your eBay store for dropshipping so you can start selling!
The eBay UK market is expected to grow by 2024, and now is the best time to start since there is high demand and low competition.
Follow this step-by-step guide to learn how to set up your eBay UK dropshipping store for success.
1. Product Research
All businesses start with product research. It is crucial because you want to validate a business model’s viability and ensure an adequate demand for it or the products. In addition, it requires an understanding of your target buyers.
What products will they need or use often? Are they willing to pay for this product? How many of these buyers are interested in these products?
These are essential questions you must address initially as you start finding the best dropshipping products.
If possible, use a market and product research tool like ZIK Analytics. Omit the guessing game when looking for the best selling items for your eBay store.
Instead, rely on data-driven decisions and sales insights to help pick products to add to your eBay UK store.
Now, I’ll show you how to use ZIK Analytics to find trendy products that you can start dropshipping on your eBay store. The first thing you must do is to visit the eBay UK website and learn about the trendy items on eBay’s website.
You can use this as a starting point for your research to analyze what products you can investigate further and see if they’re a good fit for your online store.
The first product category we will explore is one of the trending products on the eBay UK website: stocking filler gifts.
Based on the sales data from the eBay UK website, the sell through rate for this category is 1960%. There are 100 listings for this category, with a successful listings rate of 52%.
A total of 1,960 items were sold in the last 30 days for total sales earnings of £ 5,856 in the last 30 days. These products have an average product price of £ 3.47.
Now, it’s time to explore the top trendy products under this category that have done well in sales performance in the last 30 days.
The top-selling products are sold at £2.89 each and are brand new. It is a top selling item on eBay, with 1,246 sold items lifetime. Meanwhile, it has sold 320 times in the last 30 days.
Another excellent product to consider for your eBay store is this one. It is a fun tool pen, a stocking filler gift idea. The item is listed at £2.99 per piece and they have sold 2,032 times.
You can also explore the seller’s page when doing your product research. This tool lets you discover other potential products to add to your dropshipping business.
Let’s dive into this seller with the top selling product under the ‘stocking filler gifts’ category on eBay UK in the last 30 days.
As the numbers show, this is an excellent seller to do competitor analysis on since they are performing well on the eBay UK platform. Their sell through rate is 1,894,444%, and they currently have 162 active listings.
They have sold 3069 items and have earned $9,615. Their successful listings rate is 115.
Scanning their products on ZIK Analytics, you’ll find plenty of possible ideas under the same category to dropship on your online store. For example, they have magnetic toy letters and numbers for kids listed at GBP 2.49.
They’ve sold 2,047 items since it was listed and 134 times in the last 30 days.
Meanwhile, using the same tool, we can determine that this seller has many options for dropshipping suppliers for this item, such as Aliexpress UK. The seller profile on eBay UK also shows the viability of this seller as a competitor since they have a 99.3% positive rating and 634,000 items sold.
Aside from using the insights from the ZIK Analytics tool, use data from Google Trends UK and social media to determine the top trendy items you can start selling and make money from via drop shipping.
2. Find a Dropshipping Supplier
Once you understand the rules and regulations for dropshipping in the UK and find the potential products you want to add to your ecommerce store, the next step is to find the best drop shipping suppliers. Luckily, there is no shortage of UK dropshipping suppliers.
The challenge lies in vetting through these suppliers to find the right fit for your business goals.
It’s crucial to emphasize the need to find a UK based supplier. It’s the most straightforward method of choosing UK dropshipping suppliers to avoid legal issues when stocking products outside the UK.
Plus, it ensures you comply with the UK government’s policies on the timeline for shipping items to UK customers. While offering worldwide shipping and using global suppliers help expand your options and increase the possibility of getting high profit margins, the only way to ensure you can deliver items promptly is to find a UK based supplier.
There are reliable and trustworthy dropshipping suppliers in the UK, such as Aliexpress UK and Amazon UK. These websites are excellent sources of dropshipping products at low prices that you dropship on eBay for higher profit margins.
Whichever supplier you choose, I recommend spending as much time on product sourcing as needed to ensure the best shopping experience for your customers. With that said, you should carefully evaluate your product sourcing methods to ensure the highest quality products and competitive product pricing with this business model.
3. Importing Products to eBay UK Store
Another crucial factor when selecting your dropshipping supplier for eBay UK is to ensure easy integration with your eBay store. Efficient integration is essential because it simplifies the process of setting up your store, especially when dealing with multiple products.
Remember that you should ideally choose more than one UK based supplier for your dropshipping business. Therefore, adding the products manually would entail a huge amount of your time and effort.
Automating the process of importing online products to your store can streamline your business. This method is critical if you want to scale your business.
Automating the import process allows you to focus on the most crucial aspects of your business, such as ensuring the faster and safe delivery of products and achieving customer satisfaction.
4. Write eBay UK Business Policies
Writing your business policies is crucial when setting up your dropshipping store. It is vital within the eBay UK marketplace as you’re subjected to the UK government policies for online selling.
These policies will serve your store’s terms and conditions when transacting with customers online.
You need to write up three business policies: payment, shipping, and return policies. You can set your policies, but always refer to the eBay policy to help you make your own.
To write your eBay UK business policies, go to your eBay seller account dashboard and go to the Business Policies dashboard under My Account.
Click Create Policy and identify the specific policy you want to set up for your eBay store.
Payment Policy for eBay UK
Let’s start with the Payment policy, which outlines your payment method for your eBay UK store. The default payment option now is the eBay managed payments system.
This is one area wherein eBay UK differs from other eBay marketplaces since it uses Payoneer as part of the eBay managed payments system to ensure a smooth transaction during processing of payouts for eBay sellers.
Return Policy for eBay UK
The next policy you need to set up is processing customer order returns.
Again, you must go to Create Policy on your eBay account dashboard and choose Returns.
You can assign a name for the policy and set your return conditions. Always double-check your supplier’s return policy when setting up your returns policy. For example, your supplier offers a 30-day return policy, and so should you.
You can qualify as a “Top Rated Seller” status on eBay UK when you offer a 30-day return policy. Therefore, choose dropshipping suppliers in the UK that offer free returns.
This option allows you to set up ‘Return shipping paid by seller’ in your returns policy, which is far more attractive than if the buyer pays for the returns shipping.
Think about it: your buyers are already upset that they had to return the product, and you don’t want them to pay for the return shipping to aggravate the situation. Again, eBay UK policies significantly highlight the importance of customer satisfaction, so you must remember this when setting up your store policies.
If you want to learn more about how to handle returns when dropshipping, you can check out this guide.
Shipping Policy for eBay UK
Finally, you must add your shipping policy to inform buyers of expected shipping costs and times. When you click ‘Create Policy’ on your dashboard, choose the Postage option.
When setting up your eBay UK dropshipping policies, avoid specifying the courier names in the policy. Instead, add the estimated time frame for the handling and safely delivering the products.
For example, if you are shipping within the UK, the standard time frame for delivery is four to five days. Again, you must contact your UK based supplier about estimated shipping times to align with your shipping policy.
You don’t want to over-promise and under-deliver by claiming to deliver the products at a specific date, only for your suppliers to be delayed for a few days.
It is crucial to differentiate the handling time and the shipping times in your business policy. The handling time is the number of days it takes to prepare the order and provide tracking info to the customers. Ideally, you should dispatch the item in four days or under.
In addition, you must create an exclusion list for estimating the handling and delivery times of customer orders in your store. When you create an exclusion list, check the boxes next to the names of the countries or regions that you don’t deliver items to.
Once you have selected it, click Save to apply it to your business policies. You must add this information to make the customers aware that you don’t ship to their location and save them from the hassle of ordering the items only to find out this information later.
If you want to focus on British buyers, you can specify your policies as estimated for domestic shipping. It’s up to you to sell from your eBay UK store to customers outside the UK (a.k .a. offer worldwide shipping).
However, if you want to maximize the potential of the UK market, you can focus on selling within the UK to maximize your earnings and simplify the selling process.
Final Thoughts on eBay UK Dropshipping
Now, that’s a lot of information to cover, so be sure to take your time to analyze the rules and regulations for eBay UK dropshipping. If you’re feeling overwhelmed, remember that the rules for dropshipping are the same even outside the UK, with only minor differences with the taxes and other compliance requirements.
However, finding the best dropshipping suppliers and ensuring the highest customer service will be critical to your business’s success. Finding reliable suppliers ensures you have access to high-quality items at lower prices.
And providing quality customer service ensures your eBay customers will buy from you again and help you achieve a positive seller rating. Unlike the US market, dropshipping on eBay UK is not as saturated yet.
So, now is the best time to launch your eBay store, while there are fewer eBay UK sellers than in the US.
Just focus on following the best practices for online sellers to put your store ahead of the competition. Also, you should observe the best methods for marketing your products and optimizing your listings to reach the top of the search results for your target keywords.
Thinking about dropshipping on other marketplaces? Check out this guide instead
